HomeBase MetalsGlencore moves into DRC

Glencore moves into DRC

View down the grinding
circuit of Katanga’s
Kolwezi concentrator
Baar, Switzerland — MININGREVIEW.COM — 13 January 2009 – Glencore International AG – a leading, diversified natural resources group with worldwide activity in the mining, smelting, refining, processing and marketing of minerals – may win a controlling stake in the biggest underground copper mine in the Democratic Republic of Congo (DRC).

A statement to this effect released here explained that this would involve the company providing a US$265 million (R2.6 billion) loan that would keep current owner Katanga Mining Limited afloat.

Bloomberg News reports that Katanga shareholders, who lost 98% on their investments in the past year, are meeting in Toronto to approve new stock that would back the convertible loan from Glencore – the world’s biggest commodity trading company. The 953 million shares will give Glencore a stake of as much as 88%.

“Without this deal, Katanga were probably going out of business,” said Cailey Barker, a mining analyst at RBC Capital Markets in London, who has an “underperform” recommendation on the shares. “Glencore knows it’s a great asset with cheap, easy metal, and they are willing to put up the money to protect that.”

Glencore – which owns mines and smelters across five continents – would gain majority stakes in mines that can produce more than 300 000 metric tonnes of copper and 30 000 tonnes of cobalt a year. Katanga’s assets in the southern DRC include mines and a processing plant. The addition of the underground Kamoto mine and the open-pit KOV mine would raise Glencore’s copper-mining capacity by 77%.